Massive $165M Volvo Truck Investment

Volvo interests to spend up on dealerships and head office as its truck sales strengthen

GLOBAL heavy-duty equipment manufacturer Volvo Trucks has joined its local partners to commit to a $165 million investment in the Australian truck industry. Two of the brand’s truck dealers have committed $100 million for facilities in Victoria, South Australia and Western Australia while Volvo Trucks will allocate $65 million – partly to improve its own factory dealerships as well as build a new $30 million headquarters near Volvo’s 34-year-old truck factory in Wacol, Queensland.

Volvo has six sites in Wacol which is the biggest truck assembly plant in Australia. It employs 600 people in manufacturing, research and development and engineering. Wacol made more than 2000 trucks in 2015, the company says. The two privately-owned Volvo Truck dealerships – CMV in South Australia and Victoria and Truck Centre WA in Western Australia – have agreed to commit the balance to improving their infrastructure.

Volvo Truck global president Claes Nilsson, in Australia to approve financing and to gauge the market, said the company was actively looking to expand.“We need bigger facilities on service around Sydney,” he said at a press conference.Referring to the Volvo truck range he said: “We are looking at products all the time. It will be on a case-by-case basis.’’

Truck Centre WA managing director Phil Winkless, whose father Max started the original Volvo truck business in Perth in 1970, said there were no demands made by Volvo Trucks to make the financial commitment to improve its facilities.“They’re not pressuring us. They know we’re profitable and that our sales are strong,” he said. “We have recognised that to get the best out of our business we have to put a little bit in.”

That “little bit” is about $40 million. This will be committed by Truck Centre WA by the end of 2017 into refurbishment of its Kewdale dealership in Perth’s east, expansion with a new dealership in Forrestfield in the south-east, a new “shed” in Spearwood on Perth’s southern corridor, and about $9 million for a new branch in the mining hub of Port Hedland.Mr Winkless said the plans to refurbish and expand were being made in spite of a drop in Western Australian truck sales, which are down almost 28 per cent year to date.He said that was “pretty depressing” for the industry but Volvo franchise sales were up 16.5 per cent year to date in Western Australia.

“We’ve had a phenomenal 20-year period and now we are seeing the correction,” he said of WA’s sales retraction.“The north-west is still busy but there’s a lot of second-hand trucks for sale which are the result of the downturn,” he said.“This naturally affects our new truck sales.”Mr Winkless said another effect on the new-truck market was the growing online auction businesses.